Using New Markets Tax Credits with 4% Housing Tax Credits

With New Markets Tax Credit allocation from community development entities the most competitive it has ever been, consideration should be given to alternative and complimentary federal tax credit and subsidy programs. As example, mixed use projects with a residential rental component which may be financed through the New Markets Tax Credit program provided that the property is non-residential rental property should consider bifurcating the project into commercial and residential components. The New Markets Tax Credit program may then be used for the commercial component and the Federal low-income housing tax credit program for the residential rental component. 4% low income housing tax credits will provide approximately the same amount of equity as the New Markets Tax Credit Program and 9% low income housing tax credits will provide significantly more tax credit equity. The tradeoff is the restriction of the rental units with respect to both the income of the tenants and the rents paid for 30 years.

Bill Hankowsky guest speaker at Duane Morris Real Estate Reception

On May 2, 2012 Bill Hankowsky Chairman, President, and CEO of Liberty Property Trust was the guest speaker at the annual Duane Morris Affordable Housing, Community Development and Real Estate Reception held at The Morris Restaurant in Philadelphia. Liberty Property Trust is real estate investment trust with office and industrial space in more than 20 markets throughout the United States and the United Kingdom. The reception was attended by over 100 people. Mr. Hankowsky shared his insights with respect to the impact of technology on the future development and use of real estate as well as the benefits of the green development of real estate projects. The Affordable Housing, Community Development, and Tax Credit Syndication group of the Corporate Department and the Real Estate Department of Duane Morris host a Community Development and Real Estate Reception in the Firm’s Philadelphia Office in the Spring and in the Firm’s New York office in the Fall. Last Fall the guest speaker at the Firm’s Reception was Maxine Griffith who heads the seven billion dollar development of Columbia University’s new Manhattanville Campus in West Harlem, New York.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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